The barrier function of skin against noxious environmental agents is provided primarily by the cornified cell envelop (CE) in the outer portion of the epidermis. The CE is a protein complex tightly assembled by transglutaminase (TGase-mediated cross-linking of several structural proteins (e.g., involucrin). Using a signal sequence trap method, we have identified a novel secreted protein, KCS-1, that contains a leucine- zipper-like structure which is known to be responsible for dimer- formation of some transcription factors. KCS-1 is expressed specifically by keratinocytes (KC) of epithelial tissues, localized to the CE in normal human epidermis. It is up-regulated in the skin of psoriatic patients with inflammation and microbial infection, and displays anti-proteinase activity. These findings suggest that KC secrete some KCS-1 proteins (as a dimer form) into the epidermal extracellular space, some of which are trapped into the CE by TGase and some remain as free dimers inside cells. Environmental stress and tissue damage induce abundant expression of proteinase in the epidermis that is likely to be a major mediator to delivery danger (or stress) signals to KC. We thus hypothesize that KCS-1 expression is inducible by environmental stresses and it functions as a intra- and extracellular proteinase inhibitor to quench the potentially damaging effects of these harmful proteinases. Having characterized the biochemical and structural properties of KCS-1 in the previous one year funding period, we now propose to better illustrate functional properties of KCS-1, a new secreted inhibitor, in the proposed second year of funding. Functional characterization of KCS-1 will lead us to a better understanding of KC mechanisms that protect the skin and internal organs from environmental stresses and tissue damage.